Budget 2024: Custom Duty Cut On Mobiles, Circuit Boards To Benefit EMS Industry Players
In addition to Dixon Technologies, the move will also benefit unlisted players like Tata Electronics and Lava Mobiles.
The electronics manufacturing services sector is one of the sectors that will be benefiting from the Union budget, as the basic customs duty on mobile phones, mobile printed circuit board assembly, and mobile chargers has been reduced to 15%.
This was earlier at 20% and will benefit companies operating in the EMS space, especially the likes of Dixon Technologies India Ltd.
PCBs And Dixon's Benefit
Printed circuit boards are a key component for electronics. Currently, India imports and assembles the final PCBs, which are eventually used in the manufacturing of electronics by EMS players. The government has reduced the basic customs duty from 20% previously to 15%.
Dixon Technologies will be one of the biggest beneficiaries, as they are India's largest third-party mobile manufacturer.
They manufacture mobiles among other electronic items and cater to companies such as Samsung, Motorola, and Xiaomi, among others. While Dixon Technologies does not give a breakdown of revenue by products such as PCBs, box builds, etc., the mobile division is the biggest revenue contributor for the company and formed 60% of its total revenue in fiscal 2024.
Dixon Technologies is one of the listed heavyweight players in mobile manufacturing. Other players like Tata Electronics—which manufactures the iPhone in its Tamil Nadu facility—and Lava Mobiles will be the other beneficiaries under this custom duty rate cut.
Some other companies that will also benefit include Kaynes Technologies, PG Electroplast, and Amber Enterprises.
Other PCB Assemblers
There are other players as well who assemble PCBs in India but are not limited to mobile phones.
For Kaynes Technologies, which reports numbers by products, PCBs formed 55% of total revenue spread across industries such as industrial, automation, aerospace, medical, etc. The company is one of the strongest EMS players and is now venturing into the semiconductor space as well.
PG Electroplast uses PCBs for other electronics. While other players, like Amber Enterprises, started PCBs as a backward integration for their current industry products, they operate in sectors such as consumer, automotive, energy, etc.
Going Forward
It would be key to see the government's step for custom duty of PCBs for industries other than mobiles as well.
Among other budget expectations, the EMS players were hoping for newer PLI schemes on electronics components. These could have benefited them, as electronic manufacturers would be forced to locally source these components in order to avail the benefits.
